GoPro Outlook Cut At Pacific Crest, Analysts See Seasonal 'Softness'

• GoPro Inc GPRO shares have plunged 55 percent year-to-date, and are trading at the lower-end of their 52-week range of $29.62 - $98.47.
• Pacific Crest’s Brad Erickson maintained a Sector-Weight rating on the company.
• The estimates for the company have been reduced due to its minor product refresh for the holiday, management's recent commentary on poor Hero 4 Session demand, and checks, Erickson said.

Analyst Brad Erickson mentioned that the recent channel checks in the US indicated a roughly 20 percent decline in m/m sell-through as well as a decline in days of inventory due to an apparent slowdown in shipments.

Although the data is not positive, a portion of the decline is probably due to normal seasonality, with a slight pause in demand before the holiday season, Erickson pointed out.

In the report Pacific Crest noted, “What surprised us most about management's recent commentary about weak Session demand is not that the product is not selling well, but that the company seems to have made Session a more prominent part of the portfolio for this year than our prior expectations.”

The EPS estimates for FY15 and FY16 have been reduced from $1.86 to $1.73 and from $2.17 to $2.04, respectively.

“While we still expect y/y growth next year, driven by new products, further investor suspicion of market saturation continues to pose downside risk from current levels, which keeps us sidelined on the name,” Erickson said.